Watchdog sheds staff as phone moans tail off

Declining complaints and lower investigations income are prompting the industry-funded Telecommunications Industry Ombudsman to sack staff and reduce costs.

In the 12 months to June 30 this year, the TIO received a total of 193,702 new complaints, a decrease of 2 per cent on the previous year.

While revenue from industry fees and charges increased slightly from $28 million to $29 million the TIO's operating costs increased from $28 million to $30 million. In fact, the TIO recorded a deficit of $418,654, its first in over a decade.

Revenue is likely to keep falling because complaint levels started falling sharply at the start of this year, dropping 20 per cent in the final quarter of 2011-12 and this trend continued in the first quarter of 2012-13, according to the Ombudsman, Simon Cohen.

Although tens of thousands of people still have complaints and issues with mobile phone accounts increased by 9.3 per cent during 2011-12, Mr Cohen hopes a new industry consumer protection code will reduce complaint levels further.

Because the TIO is funded by the industry per complaint, this means staff numbers will have to decrease from 266 staff at June 30.

"We have had to reduce staff during the past period of time because of a reduced demand for our services," ombudsman Simon Cohen said. Complaints fell 20 per cent in the final quarter of 2011-12 and continued to drop in the first quarter of 2012-13, he added.

The TIO has asked for voluntary redundancies and stopped replacing departing staff and shifted staff internally to suit demand.

"We are very dependent upon what demand is like for our services. If the demand continues to reduce then we would require less people to do the work," Mr Cohen said. "Certainly there are some positive signs that customer service and complaint handling is genuinely improving in the telco space."

The decline in complaints did not reduce how much telcos had to pay to fund the industry body. Telstra was charged $11 million by the TIO in complaint fees and overhead charges, up from $9.7 million the previous financial year.

Vodafone Hutchison Australia paid $10 million, up from $7 million, and SingTel Optus' charges nearly tripled to $6.3 million from $2 million the previous year, however this was due to a 47 per cent increase in complaints against Optus.

The charges increased because telcos fund the TIO through complaint fees and a proportional overhead charge. Larger telcos pay a larger fee, which is why Telstra's fees increased even though complaints against it declined.

The TIO's income also declined due to a sharp reduction in the level three and four investigations, which are charged at $530 and $2400 respectively. Level three investigations fell to just 401, down from 2415 in 2010-11, while level four investigations fell to 41 from 357.

The decline in senior investigations is due to the introduction of a new conciliation system that warns telcos before a complaint is escalated and giving them another opportunity to resolve a dispute at level two. However, more complaints reached level two than the previous period at 19,358 up from 17,863.

"I have a strong view that consumers, when they have disputes, want to find ways to resolve them as quickly and as informally as possible ... speedy resolution of disputes in a way that consumers are agreeable is a key driver to satisfaction for consumers.

"And so we were very keen to have a look at how we could make our level two process less formal and speedier for consumers and equally for service providers," Mr Cohen told.

Industry peak body Communications Alliance said it was happy with the TIO’s new conciliation process.

“As complaint volumes fall, the cost of the TIO to service providers should also fall. While recognising that reducing operational expenditure might lag slightly the reduction in activity levels, fewer complaints should mean a leaner, less expensive TIO. What is important is that if the TIO continues to seek to expand its remit, this should be done in ways that relate to its core mission as a source of alternative dispute resolution, and should be funded by increased efficiencies, not by additional imposts on the industry,’’ chief executive John Stanton told BusinessDay.

“The TIO deserves credit for the new conciliation system, which is a very welcome initiative and so far is working quite effectively,’’ he added.